We've put together the necessary information to run your medical, dental, and vision insurance through Gusto. If you get stuck on any of the steps below, reach out to us 😉

Click here to get educated on healthcare in general and how to obtain a plan.

Why are we running insurance through payroll?

How do I set up my health insurance?

How will I make my insurance payments?

How is my insurance payment going to be recorded in QuickBooks?

What if there are untracked payments?

How will my contributions be reported in payroll?


Why are we running insurance through payroll?

For reporting purposes. Health and accident insurance premiums paid on behalf of a greater than 2-percent S-corporation shareholder-employee are deductible by the S-corporation and reportable as wages on the shareholder-employees Form W-2, subject to income tax withholding.

However, these additional wages are not subject to Social Security, or Medicare (FICA), or Unemployment (FUTA) taxes if the payments of premiums are made to or on behalf of an employee under a plan or system that makes provision for all or a class of employees (or employees and their dependents). Therefore, the additional compensation is included in the shareholder-employee’s Box 1 (Wages) of Form W-2, Wage and Tax Statement, but is not included in Boxes 3 and 5 of Form W-2.

Sources:

IRS: S Corp Compensation Medical Insurance


How do I set up my health insurance in Gusto?

To get this done, you need to know the monthly premium. In Gusto, you would go to Benefits > Health and Life

  • Click Medical, Dental & Vision Managed by Third Party

  • Select Yes — we currently offer this benefit

  • Input Benefit Name (Keep it generic: Medical Insurance)

  • Input Health Benefit Type

  • Employee deduction per pay period: input $0.00

  • Company Contribution per pay period: Put the premium per pay period here

  • If payroll ran monthly: input 100% of premium

  • If payroll ran 2x/month: input 50% of premium

  • If payroll ran every other week: Calculate premium * 12/26

  • If payroll ran weekly: Calculate premium * 12/52


How will I make my insurance payments?

You’ll make the payments to your benefits provider from your business checking or credit card account. Gusto does not remit payment to third party benefits providers, so please ensure you make these payments yourself. Payments from you business checking or credit card should be applied to the Payroll Liabilities account in Quickbooks.


How are my insurance premiums reported in Gusto going to be recorded in QuickBooks?

Premiums reported in Gusto are automatically synched to Quickbooks. Once the benefit is set up in Gusto, go to Settings > Integration and map in Quickbooks.

For example:

Employer Benefit Expenses for Medical | Medical Insurance mapped to:

Payroll - Health Insurance

Employer Benefit Expenses for Medical | S-Corporation Owner’s Medical Insurance mapped to:

Payroll - Health Insurance

Benefit Liabilities for Medical | Medical Insurance mapped to:

Payroll Liabilities

Benefit Liabilities for Medical | S-Corporation Owner’s Medical Insurance mapped to:

Payroll Liabilities

Not sure how to do this? Reach out to your Collective Member Relationship Manager.


What if there are untracked payments?

Email

To:Gusto: [email protected]

CC: [email protected]

Subject: Benefit Adjustment for Company X

Hi Gusto Support team,

I recently ran my Medical/Dental/Vision insurance through Gusto. Could you please help us make the adjustments so we can track all those amounts paid earlier in the year, which amounts to $X,XXX.

Thanks all!


How will my contributions be reported in payroll?

The information in Gusto will be automatically synced to Quickbooks. You will then categorize health premium payments as Payroll Liability in QBO.

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